Online Advertising

 Online advertising is a form of advertising that uses the Internet and World Wide Web in order to deliver marketing messages and attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, advertising networks and e-mail marketing, including e-mail spam.

A major result of online advertising is information and content that is not limited by geography or time. The emerging area of interactive advertising presents fresh challenges for advertisers who have hitherto adopted an interruptive strategy.

Online video directories for brands are a good example of interactive advertising. These directories complement television advertising and allow the viewer to view the commercials of a number of brands. If the advertiser has opted for a response feature, the viewer may then choose to visit the brand’s website, or interact with the advertiser through other touch points such as email, chat or phone. Response to brand communication is instantaneous, and conversion to business is very high. This is because in contrast to conventional forms of interruptive advertising, the viewer has actually chosen to see the commercial.

The three most common ways in which online advertising is purchased are CPM, CPC, and CPA.

    * CPM (Cost Per Thousand) is where advertisers pay for exposure of their message to a specific audience. CPM costs are priced per thousand impressions. The M in the acronym is the Roman numeral for one thousand.

    * CPV (Cost Per Visitor) is where advertisers pay for the delivery of a Targeted Visitor to the advertisers website.

    * CPC (Cost Per Click) is also known as Pay per click (PPC). Advertisers pay every time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing which links directly to their website.

    * CPA (Cost Per Action) or (Cost Per Acquisition) advertising is performance based and is common in the affiliate marketing sector of the business. In this payment scheme, the publisher takes all the risk of running the ad, and the advertiser pays only for the amount of users who complete a transaction, such as a purchase or sign-up. This is the best type of rate to pay for banner advertisements and the worst type of rate to charge. Similarly, CPL (Cost Per Lead) advertising is identical to CPA advertising and is based on the user completing a form, registering for a newsletter or some other action that the merchant feels will lead to a sale. Also common, CPO (Cost Per Order) advertising is based on each time an order is transacted.

    * Cost per conversion Describes the cost of acquiring a customer, typically calculated by dividing the total cost of an ad campaign by the number of conversions. The definition of "Conversion" varies depending on the situation: it is sometimes considered to be a lead, a sale, or a purchase.
The display advertising portion of online advertising is increasingly dominated by rich media, generally using Adobe Flash. Rich media advertising techniques make overt use of color, imagery, page layout, and other elements in order to attract the reader's attention. Some users might consider these ads intrusive or obnoxious, because they can distract from the desired content of a webpage. Some examples of common rich media formats and the terms of art used within the industry to describe them:

    * Banner ad: An advertising graphic image or animation displayed on a website, in an application (such as Eudora), or in an HTML email. Banner ads come in numerous standard sizes defined by the IAB, but originally (in the mid to late 1990s) were only rectangular GIF images 468 pixels wide by 60 pixels high. Media types and sizes have since become much more varied.
    * Interstitial ad: The display of a page of ads before the requested content.
    * Floating ad: An ad which moves across the user's screen or floats above the content.
    * Expanding ad: An ad which changes size and which may alter the contents of the webpage.
    * Polite ad: A method by which a large ad will be downloaded in smaller pieces to minimize the disruption of the content being viewed
    * Wallpaper ad: An ad which changes the background of the page being viewed.
    * Trick banner: A banner ad that looks like a dialog box with buttons. It simulates an error message or an alert.
    * Pop-up: A new window which opens in front of the current one, displaying an advertisement, or entire webpage.
    * Pop-under: Similar to a Pop-Up except that the window is loaded or sent behind the current window so that the user does not see it until they close one or more active windows.
    * Video ad: similar to a banner ad, except that instead of a static or animated image, actual moving video clips are displayed.
    * Map ad: text or graphics linked from, and appearing in or over, a location on an electronic map such as on Google Maps.
    * Mobile ad: an SMS text or multi-media message sent to a cell phone.

In addition, ads containing streaming video or streaming audio are becoming very popular with advertisers.

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